Alf's Articles

Make The Network Work For Your Business

by Alf Nucifora

For most small businesses, particularly start-ups and the home-based variety, getting market visibility and generating leads are still primary needs and the keys to short-term survival and eventual long-term sustainability and growth. For the average small business, it's a matter of limited dollars (or none) for advertising, PR and promotional support. For the start-up, it's that plus the problem of no credibility.

Networking Can be the Answer

At its basic level, networking and referral marketing has always been the mainstay of the average entrepreneur. It's why many of us go to Chamber meetings with a fistful of business cards, eager to pounce on any hapless prospect who communicates the slightest degree of interest or inclination to buy.

On a more formal level, a number of national leads clubs have now been developed for the express purposes of generating leads and providing valuable business advice within the framework of an organized meeting protocol. The clubs provide an affordable platform for the very small business, the entrepreneurial start-up and the home-based operation to be part of a capillary system that feeds leads and shares experience and advice. Ultimately, this sharing process is derived from the trust, the schmooze and the networking that takes place when the group gets together. Individuals make human contact and do business in a controlled environment where limited time is used efficiently.

Three Biggies

In the U.S., there are three clubs that have an operating history of success and stake a claim to prominence in lead networking circles. All, incidentally, are based on the West Coast. LeTip, out of San Diego, is one of the largest with 10,000 members in 450 chapters in the U.S. and Canada. Business Network International (BNI), also based in Southern California, claims a world-wide membership of 35,000. One of the oldest, Ali Lassen's Leads Club based in Carlsbad, California has 6,500 members in more than 300 chapters throughout the U.S. and Australia.

In an interview with Lisa Bentson, President of Leads Club, the networking formula works something like this. Average chapter size is 15 and never more than 30 (in non-competing business categories); members pay $75 to join and $26 monthly to attend weekly meetings; miss more than 12 of the 52 scheduled meetings and you're out of the chapter and the Club. The 75-minute meetings are normally held at breakfast or at lunch and begin and end with 30-second promotional spiels by each of the participants…a quick and efficient way of reminding your fellow chapter members about who you are, what you do and why they should refer you. Leads are then brought to the table and exchanged via lead cards. Three members are spotlighted at each meeting to present more in-depth 10-minute profiles of their operations, including a description of the types of leads they are seeking as well as a recitation of how they can help others in the group or how others can help them.

According to Bentson, the average chapter member sees an increase of between 16%-25% in business volume once they've been with their group for 3-6 months. The value of each lead exchanged between members is worth about $300 on average in new business. However, the bulk of members leave after the two-year mark. Bentson also stresses that the key to lead success is follow-up…a minimum of at least three times before a lead can be converted to interest and from there to eventual closing of the sale.

Leads Club operates on the principle that most people know between 200-250 business peers, professional associates and friends. Therefore, a chapter group of 30 will theoretically be able to tap into a network of up to 7,500 potential customers.

Leads Club chapters tend to have heavy representation from real estate, financial services and personal services, but the highest revenue generating categories include interior design, business consulting, computer consulting, tax accounting, repair and maintenance, clothing and landscaping.

The networking formula may sound easy, but it doesn't work for everyone. Networkers should only join organizations that generally interest them. And, they cannot afford to be pushy. Exhibiting tact and diplomacy is of paramount importance. Those who take but don't give back are quickly ostracized. The obvious opportunist is quickly shunned. Says Joe Mittiga, Executive Director of Leads Club/Georgia Region, "Networking groups are really about being surrounded by friends who can help each other. It's not just about gaining leads, it's about developing relationships, building camaraderie, and sharing ideals in addition to referrals and leads."